Ruqayyah Snyder
Australia, officially the Commonwealth of Australia, is a highly developed country with a mixed-market economy rich in natural resources. It is the sixth-largest country in the world and the largest in Oceania. Australia has a strong commitment to multilateralism and is a member of several defence, intelligence, and security groupings. It has pursued the cause of international trade liberalisation and has signed up to a wide range of international rights treaties. Australia has a stable democracy and a highly skilled workforce. Before the COVID-19 pandemic, Australia recorded 28 straight years of annual economic growth and was the world's 14th largest economy.
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What You'll Learn
Australia's economy is based on raw materials
Australia is a developed country with a high standard of living, despite having an economy based on raw materials. It has a relatively open, trade-exposed economy, which means that changes in other countries' demand for its goods and services can significantly impact its economy. Australia has a mixed-market economy, with a large service sector, a sophisticated industrial sector, and an agriculture sector. The country has a high level of economic freedom and is a member of the World Trade Organization (WTO).
Australia has a total wealth estimated at AUD$10.9 trillion as of September 2019 and was the second-wealthiest country in the world in 2019, behind Switzerland, based on average wealth per adult. In 2018, Australia became the country with the largest median wealth per adult, but this slipped in 2019. Australia's economy is characterised as a "two-speed economy", with Western Australia and the Northern Territory being the only states that have experienced economic growth in recent years.
The Australian economy has been heavily influenced by its exports of raw materials, such as iron ore, coal, natural gas, and wool, to China, its largest trading partner. The increase in mining revenues and investment has spilled over into other parts of the Australian economy, leading to increased demand for workers and higher wages. This has resulted in higher tax and royalty receipts for the government. Australia's terms of trade reached very high levels during the 2005-2011 boom, driven by large increases in the prices of some of its commodity exports.
Australia has a highly educated workforce and is committed to innovation, with emerging technologies impacting various sectors. The country has a strong labour market, with relatively low credit card and student loan debt, and property ownership levels contributing to its high median wealth. Australia's economy has grown faster than any other major developed country since 1992, and it recorded 28 straight years of annual economic growth before the COVID-19 pandemic in 2020.
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Australia's economic growth
Australia has enjoyed strong economic growth over the years, with its economy dominated by the service sector. In 2017, the service sector accounted for 62.7% of GDP and 78.8% of the labour force. The country has also benefited from its natural resources, particularly mining and pastoralism, which have attracted significant investment and contributed to economic growth since the 1840s gold rush.
Australia has fifteen Free Trade Agreements (FTAs) with 26 countries, which have opened up export markets, reduced business costs overseas, and increased choice and affordability for Australians. The country has strong economic ties with East and Southeast Asian countries, which accounted for about 64% of exports in 2016. China is Australia's largest trading partner, accounting for 40% of exports and 17.6% of imports.
Australia's economy has grown faster than any other major developed country since 1992. In 2020, before the COVID-19 pandemic, the country recorded 28 consecutive years of annual economic growth. Australia's GDP rose 0.2% in the March 2025 quarter and by 1.3% since March 2024. Australia's government stimulus spending, proximity to China, and a related mining boom helped it avoid a recession during the 2008-2009 global financial crisis.
The country's economic growth is also driven by innovation in enterprise, science, and research sectors. Australia has developed a National Innovation and Science Agenda to support business growth, local jobs, and global success. The Commonwealth Scientific and Industrial Research Organisation (CSIRO) is the country's top research institution, working with universities, government departments, and industries across over 80 countries.
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Australia's service sector
The service sector's growth is partly due to Australia's focus on exporting commodities rather than manufactured goods, which has underpinned a significant increase in its terms of trade since 2000. The country's service sector also benefits from its highly educated workforce, which is essential to the production of services.
In 2016, the copyright industries contributed $122.8 billion to the Australian economy, or 7.4% of its total economic output. This was an increase of $8.5 billion compared to 2011, with a growth in value added of 1.4% per year. These industries include media, with News Corp Australia and Nine Entertainment being the major publishers of newspapers and providers of television and radio stations.
Overall, Australia's large and growing service sector plays a crucial role in its economy, contributing significantly to its GDP, employment, and international competitiveness.
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Australia's mining industry
Today, Australia remains a global mining powerhouse, with mining activity in all its states and territories. In 2019, the country was the world's largest producer of iron ore, bauxite, and lithium. It was also a top producer of gold, manganese, lead, zinc, cobalt, uranium, salt, copper, nickel, silver, tin, phosphate, and sulfur. The mining industry in Australia is diverse, with a wide range of ores, gems, and minerals being extracted. Coal is mined in every state except South Australia, and the country is a major producer and exporter of coal, ranking fourth in production and second in exports.
The mining industry in Australia is dominated by several large multinational companies, including BHP, Rio Tinto, Newcrest, Fortescue, and Whitehaven Coal. These companies have operations not only in Australia but also in various other countries worldwide. The industry has generated significant revenues, with the mining industry contributing $527.2 billion in revenue in 2023. The sector represents a substantial portion of the Australian Securities Exchange (ASX) market, with almost one-third of the listed companies being small mining and mineral exploration businesses.
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Australia's high living standards
Australia has some of the highest living standards in the world. This is due to a combination of factors, including its strong economy, high-quality education system, and robust healthcare system. Australia's economy has grown faster than any other major developed country since 1992. The country has a large service sector, which accounts for about 62.7% to 71.2% of its GDP, and is backed by a highly educated workforce. Australia also has plentiful natural resources, which have contributed significantly to its economic growth.
The country's commitment to innovation and technology has also played a crucial role in its economic success. The Australian government has implemented a National Innovation and Science Agenda to support business growth, job creation, and global success. The Commonwealth Scientific and Industrial Research Organisation (CSIRO) is Australia's leading research institution, working with universities, government departments, and industries to drive innovation.
The cost of living in Australia is relatively high, particularly in capital cities like Sydney. However, there is no tipping culture in Australia, which can offset some of the daily living costs. Australia also has a well-developed banking system, with major banks such as NAB, ANZ, and the Commonwealth Bank of Australia, as well as smaller banks and widespread access to ATMs.
Australia's lifestyle, attitudes, and values are also attractive to global companies and employees. The country is known for its clean, safe, and well-organised cities, and its friendly and happy population. Australia ranked fourth in the Center for Global Development's 2021 Commitment to Development Index and was the happiest country in the Asia and Oceania regions in 2023, according to a World Happiness Index.
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Frequently asked questions
Yes, Australia is a developed country.
Australia has been a developed country since at least 1945, when it became a founding member of the United Nations.
Australia inherited a fully functioning democracy, court system, set of laws, science, industrial techniques, political system, global alliances, etc. from the start. Australia also has plentiful natural resources and a sophisticated services sector backed by a highly educated workforce.
Australia is the sixth-largest country in the world and the largest in Oceania, with a total area of 7,688,287 sq km (2,968,464 sq mi).
Australia has one of the strongest performing economies in the world. Before the COVID-19 pandemic in 2020, Australia recorded 28 straight years of annual economic growth and was the world's 14th largest economy.
